Performance Report of SAI India for 2021-22

Supreme Audit Institution of India
PERFORMANCE
REPORT 2021-22

From the desk of Comptroller and Auditor
General of India
I am pleased to present the Performance
Report of the Supreme Audit Institution (SAI) of India
for the year 2021-22. The report captures significant
activities of SAI India during the year.
We function in accordance with the authority
and mandate under the Constitution of India and
its laws, which envisages a unique role for the
Comptroller and Auditor General of India in enforcing
the accountability of both the Union and the State
Government Departments to the legislature. Apart from
audit functions, we are also vested with accounting
and entitlement responsibilities for the majority of the
States.
For a second year in a row, we were compelled
to contend with the challenges posed by COVID-19
pandemic. Learning from the previous year, we
discharged our functions from remote locations by
leveraging our infrastructure, our tools and above all, our knowledge. I am happy to report that we made
significant improvements in achieving our strategic priorities. In fact, we outdid our previous performance by
finalising 165 Audit Reports for presentation in the Parliament and State Legislatures during the year, of which
34 were for tabling in Parliament and 131 in State Legislatures. As a result of our concerted efforts, Finance and
Appropriation Accounts of 27 out of 28 States for 2020-21 were compiled and certified by end March 2022.
We were honoured to have the Hon’ble Prime Minister of India, Shri Narendra Modi, unveiling the statue
of Sardar Patel in our office premises and addressing us at the inauguration of our Audit Diwas celebration at
16th
November 2021. A Compendium of new initiatives and good practices in SAI India, titled ‘The Catalysts....
in pursuit of Good Governance’ was also released to mark the occasion.
The first of the newly instituted ‘CAG’s Awards for Innovation and Excellence in Public Auditing and
Accounting’ were conferred on teams selected from our offices spread across the country. The awards
recognised projects that reflected out of the box thinking and a passion to achieve high levels of quality and to
streamline our systems. We also acknowledged teams that worked beyond the call of duty to ensure health and
safety of our staff during the COVID outbreak.
SAI India is constantly engaged with studying and assimilating the changes in our functional environment
and ensuring that we evolve and adapt our capacities and systems to keep pace with it. Against the backdrop of
the pandemic, Governments moved faster towards e-governance solutions for delivery of public services using
Direct Benefit Transfer (DBT) platform. We, in SAI India, also evolved our processes, infrastructure and capacities
to ensure that the CAG’s mandate is effectively discharged in the IT driven governance models. To streamline
and optimise our audit management systems, development of our One-IAAD-One-System (OIOS) application, an
end-to-end Audit Process and Knowledge Management System that will eventually lead to complete digitisation
of our business processes in SAI India, gained momentum during the year and 102 offices were on boarded onto
the platform. About 60 per cent of these offices are already at an advanced level of maturity in the use of OIOS.
An Appropriation Accounts dashboard,was developed and hosted on our website, which provides a
bird’s eye view of the budgets and actual expenditures of the State Governments. Electronic data transfer,
information sharing through SMS services, e-authorisation and online complaint redressal mechanisms are
some of the measures taken to improve the delivery of our entitlement services and ensure that we comply
with the Citizens’ Charter.

With increasing focus on enhancing good governance at the grass root level i.e. the Panchayati Raj
Institutions and Urban Local Bodies, we engaged extensively with domain experts and stakeholders for capacity
building and to further strengthen accountability and transparency. As a part of these engagements, we
organised a panel discussion on ‘Enhancing good governance through strengthening of Local Bodies Audit’ with
panelists comprising Secretaries to Government of India and members of the CAG’s Audit Advisory Board. To aid
the primary auditors of these institutions and to bring better clarity on the Financial/Certification Audit process
and reporting requirements, we released updated guidelines for financial audit of Panchayati Raj Institutions.
SAI India also remains committed to the INTOSAI strategic objectives towards achievement of the
Sustainable Development Goals. Audit of implementation of the SDGs has been an important part of our
Performance Audits. Health, nutrition, clean water, education and environmental issues were some of the
areas of our focus during the year.
During the year, we continued our journey of introducing Natural Resource Accounting in India. Our
Concept Paper on Natural Resource Accounting (NRA) in India, prepared in July 2020, contains a three-term
plan for implementing NRA in India in accordance with the System of Economic and Environmental Accounting
– Central Framework of the United Nations. As per the plans and despite the pandemic, we managed to
prepare the State-wise Asset Accounts on Mineral & Non-Renewable Energy Resources of almost all states
of the country. A Consultative Committee comprising various stakeholders reviewed these Accounts and we
are finalising the Accounts based on the suggestions received. The Natural Resource Accounts would be a
first-of-its-kind endeavour presenting the information on the stock and the flows of Natural Resources of all the
states. We are also developing a Dashboard on the Natural Resources Accounts, which will be very useful to
both the common citizen and the policy makers.
We proactively participated in international fora and in the activities of International Organisation of
Supreme Audit Institutions (INTOSAI) and Asian Organisation of Supreme Audit Institutions. We now audit five
bodies of United Nations namely, the Food and Agriculture Organisation of the United Nations (2020-2025),
World Health Organisation (2020-2023), Inter Parliamentary Union (2020-2022), Organisation for Prohibition
of Chemical Weapons (2021-2023) and International Atomic Energy Agency (2022-2027). Our appointment as
External Auditor to these bodies is a recognition of our standing among our peers as well as our professionalism
and strong national credentials.
SAI India values collaborative partnerships with other SAIs for knowledge sharing towards gaining
expertise in public sector audit and better professional practices. We have signed 15 Memorandums of
Understanding (MOUs) with different SAIs. Our bilateral ties with these SAIs not only strengthen our relations
with these countries but also serve to enhance mutual cooperation for the development of an improved audit
quality regime.
Our achievements reflect the dedicated work of our employees. We invested significantly in their
professional development. Various training programs were held under the aegis of SAI India to benefit both our
employees and external stakeholders. Our International Training Centres at Noida and Jaipur provided quality
training in IT and environment areas respectively, for both international and national participants.
This year also, we continued to improve our audit practices and methodologies, consistent with
international best practices. To strengthen our Audit Quality framework, we revised our peer review guidelines.
These guidelines are aligned with the national standards and international best practices and will be significant
in improving our performance.
I hope this Performance Report helps our stakeholders, including legislators, executives, academia
and members of the public to have an overall view of our work. I thank them all for their cooperation and
contribution.
(Girish Chandra Murmu)
Comptroller & Auditor General of India

4
SAI INDIA
Table of Contents
Section 1:
Chapter Contents Page No.
Preface 7
Section 2:
SAI India : Mandate and
Structure
Fulfilling our mandate
Chapter 1 Milestones in the evolution of the Supreme Audit
Institution of India
11-17
Chapter 2 Mandate of SAI India 19-28
Chapter 3 Organisation of SAI India 29-33
Chapter 4 Training Infrastructure 35-41
Chapter 5 How we manage our resources 43-47
Chapter 1 Fulfilling our Audit Mandate 51-65
Chapter 2 Fulfilling our Accounts Mandate 67-77
Section 3:
Recent strides
Chapter 1 Development of Guidances 81-91
Chapter 2 Capacity Building 93-102
Chapter 3 Internal Controls and Quality Assessment 103-105
Chapter 4 Our IT initiatives 107-116
Chapter 5 Audit Diwas 117-124
Chapter 6 Other activities, no less important 125-130

5
Performance Report 2021-22
Chapter Contents Page No.
Section 4:
Interaction with
stakeholders
Chapter 1 Our interaction with Legislative Committees 135-138
Chapter 2 Audit Advisory Board 139-140
Chapter 3 Climbing the learning curve 141-147
Section 5:
International Relations
Chapter 1 Our engagement with United Nations Organisations 151-155
Chapter 2 Our Engagement with the International Organisation
of Supreme Audit Institutions
157-170
Chapter 3 Our Engagement with the Asian Organisation of
Supreme Audit Institutions
171-174
Chapter 4 Bilateral/ Multilateral interactions 175-180
Chapter 5 International Training Programmes 181-183

7
Preface
About this Performance Report
The Constitution of India has entrusted the Comptroller and Auditor General of
India (CAG) with the responsibility of audit of accounts of the Union and States and other
entities. CAG is the Supreme Audit Institution (SAI) of India and is expected to promote
financial accountability and transparency in the affairs of the audited entities. SAI India is
also mandated to advise Government on the format of accounts and compilation of State
Government Accounts.
This report aims to meet the accountability requirements by reporting on the
extent to which SAI India has discharged its duties with regard to its audit and accounts
mandate and required reporting. It also brings out regularity and efficiency in the use of
SAI resources, as also the impact of our audit.
This report seeks to create awareness and understanding about the CAG and
the Institution’s role and functions, as also to inform our clients and stakeholders, both
internal and external, about our key results and achievements. It simultaneously aims to
share information about innovations within our organisation.

Statue of Father of the
Nation Mahatma Gandhi in
the CAG office premises

1
SAI India: Mandate
and Structure
SECTION
Chapter 1
Milestones in the evolution of the Supreme
Audit Institution of India
Chapter 2
Mandate of SAI India
Chapter 3
Organisation of SAI India
Chapter 4
Training Infrastructure
Chapter 5
How we manage our resources

11
1.1 Our legacy
The Supreme Audit Institution (SAI) of India is one of the oldest institutions
of India. The role of the Comptroller and Auditor General of India (CAG) has evolved
through legislature and practice. Just prior to the first war of Independence in 1857, a
major administrative reorganisation was initiated by the then Governor General of India,
Lord Cannings. This led to the setting up of, for the first time, a separate department
with an Accountant General at the helm in May 1858. He was responsible for accounting
and auditing of the financial transactions under the East India Company. After 1857, the
British Crown took over the administration of India and passed the Government of India
Act, 1858. This Act introduced a system of an annual budget of Imperial Income and
Expenditure in 1860. The budgeting system laid the foundation stone of Imperial Audit.
Sir Edward Drummond took charge on 16 November 1860 as the first Auditor General.
The term Comptroller and Auditor General of India was first used in 1884.
Under the Montford Reforms of 1919, the Auditor General became independent of the
Government. The Government of India Act, 1935 strengthened the position of the Auditor
General by providing for Provincial Auditors General in federal set-up. Till 1947, when the
last British Auditor General Sir Bertie Monro Staig handed over the reins, the department
remained an integral part of British administration and provided unified accounting and
auditing arrangements for the whole of British India.
1
Milestones in the evolution
of the Supreme Audit
Institution of India
Chapter

12
SAI INDIA
Post-Independence in 1947, these arrangements continued till the adoption of
Constitution of India in 1950 which created the institution of the Comptroller and Auditor
General of India. Mr. V. Narahari Rao was the first Comptroller and Auditor General
of independent India. The passing of the Comptroller and Auditor General’s (Duties,
Powers and Conditions of Service) Act by the Parliament in 1971 further strengthened
the position of SAI India as an independent constitutional authority with the overarching
responsibility of oversight over public expenditure.
Dr. B. R. Ambedkar, Chairman of the Drafting Committee of the Constitution, in
his speech in the Constituent Assembly said
‘I am of opinion that this dignitary is probably the most important officer in the
Constitution of India. He is the one man who is going to see that the expenses
voted by Parliament are not exceeded, or varied from what has been laid down
by Parliament in what is called the Appropriation Act.’

13
Genesis of our Institution
Original excerpts of order for formation of General Department of
Accounts issued on 4 December 1857
These photographs have copy right reserved with the National Archives of India, which have
been obtained by CAG office for specific purposes only.

14
SAI INDIA
Original excerpt of the Government of
India Act 1935
In the ancient Mauryan times, the post of State Auditor was known as
Akshapatala-Adhyaksha presiding over various sub-auditors who were known as
Akshapatala.
Sir Edmund Drummond was appointed as First Auditor General of India on
16 November 1860.
Original excerpt of the Government of
India Act 1919
The Government of India Act 1919
gave statutory recognition to the
CAG.
The Government of India Act
1935 strengthened the CAG’s
independence.
After Independence of India, the
Constitution of India accorded a
special status to the CAG to ensure
accountability of the executive to
the legislature.
These photographs have copy right reserved with the National Archives of India, which have
been obtained by CAG office for specific purposes only.

15
1.2 Important milestones in the evolution of SAI India
1851-1860 1861-1870
1931-1940
1921-1930
1858: A separate department under an Accountant General responsible
for accounting and auditing financial transactions of East India Company
was created
1860: The first Auditor General of India under the British crown was
appointed
1866: The Auditor General
of India was designated
as Comptroller General of
Accounts
1935: The Government of India Act, 1935
strengthened the CAG’s independence and
status by providing for (i) appointment of CAG
by the King of England, (ii) removal of CAG from
office in like manner and on the like grounds as
a judge of the Federal Court and (iii) debarring
CAG from holding any office under the Crown in
India on vacating the office. The post of Auditor
General was designated as Auditor General of
India
1936: Government of India (Audit and Accounts
Order), 1936 was issued detailing the auditing
and accounting functions of the CAG
1938: Audit Code was updated which
superseded all earlier rules and instructions
contained in the earlier edition issued in 1921
1921: Auditor General’s Rules
1921 made specific provision
for audit of receipts
1924: Audit of Customs revenue
was entrusted to the Auditor
General
1925: The Commercial Audit
branch was set up in the Indian
Audit Department
Pre-Independence (upto 1947)
1881-1890
1884: The Comptroller General
of Accounts was re designated as
Comptroller and Auditor General (CAG)
of India with responsibilities for both
audit and accounts
1911-1920
1919: The Government of India Act, 1919
gave statutory recognition to the CAG as
the final audit authority in India and was
designated as Auditor General in India

16
SAI INDIA
1947-1950
1947: Government of India (Audit and Accounts
Order), 1936 was adopted by the Indian
Provisional Constitution Order 1947
1948: Mr. V. Narahari Rao, the then Secretary to
the Government of India, Finance Department,
was appointed as the first Indian Auditor
General of the free Dominion of India on 15
August 1948
1950: The Constitution of India provided for
the Comptroller and Auditor General of India,
entrusted with the accounting and auditing
functions of the Union Government and the
State Governments, including the centrally
administered areas/Union Territories
2011-2020 2001-2010
2002: Government Accounting Standards Advisory Board
was set up with the support of the Government of India
to establish and improve standards of Government
accounting and financial reporting including enhancing
accountability mechanism l Manual of Standing Orders
(Audit) was revised and updated l The revised CAG’s
Auditing Standards were issued which suitably adopted
restructured auditing standards issued by INTOSAI
in 2001 l CAG became External Auditor of Food and
Agriculture Organisation for 2002-2008
2004: Performance Auditing Guidelines were issued
which helped the SAI India to adopt the prevalent
international standards of performance auditing l CAG
became External Auditor of World Health Organisation for
2004-2012
2007: Regulations on Audit and Accounts, 2007 were
issued by CAG by using its powers to frame rules and
regulations under the CAG’s DPC Act
2010: CAG became External Auditor of World Food
Programme and International Organisation for Migration
for 2010-2016
2012: Restructuring of Audit offices was
implemented to introduce sectoral orientation
in audit l CAG became External Auditor of
International Atomic Energy Agency for 2012-2016
and World Intellectual Property Organisation for
2012-2017
2014: Revised Performance Auditing Guidelines
were issued l CAG became Member of the UN
Board of Auditors for 2014-2020
2016: Compliance Auditing Guidelines were issued
2017: CAG’s Auditing Standards were revised and
updated
2020: The Regulations on Audit and Accounts,
2007 were substituted by Regulations on Audit and
Accounts (Amendments) 2020 l Restructuring of
Audit offices was implemented to complete the
process of vertical and horizontal integration based
on clusters/sectors l CAG became External Auditor
of Food and Agriculture Organisation for 2020-
2025, World Health Organisation for 2020-2023
and Inter Parliamentary Union 2020-22
1953: Comptroller and Auditor
General (Conditions of Service Act)
1953 was promulgated
1956: The Indian Companies
Act 1956 gave legal status to
Government companies and
provided for supplementary
audit by CAG, who also advised
Government on appointment of
auditors to companies.
1960: A Memorandum of
Understanding for audit of income
tax receipts and refunds was
agreed with Government of India
1962: In super
session of Audit
Code, a Manual of
Standing Orders
(Technical) in two
volumes was issued
1951-1960 1961-1970
Post-Independence (after 1947)

17
1971-1980 1981-1990
1991-2000
1971: The CAG’s DPC (Duties, Powers & Conditions of
Service) Act, 1971, was passed under the Constitution
to regulate the duties, powers and conditions of service
of the CAG
1976: The CAG’s DPC (Duties, Powers & Conditions of
Service) Act, 1971 was amended to relieve the CAG of
the duties and functions relating to maintenance of
accounts of Government of India
1984: The Composite Accountants
General offices were bifurcated into
two distinct offices with separate
cadres i.e. Accountant General
(Audit) to deal with all audit work
and Accountant General (A&E)
to deal with all accounting and
entitlement functions
1991: Manual of Standing Orders (Technical) was revised and updated with changed name Manual
of Standing Orders (Audit)
1993: CAG became Member of the United Nations Board of Auditors for 1993-1999
1994: The first Auditing Standards were issued detailing the basic principles and practices which the
Auditors should follow
1996: CAG became External Auditor of International Centre for Genetic Engineering and
Biotechnology for 1996-2004
1997: CAG became External Auditor of Organisation for Prohibition of Chemical Weapons for
1997-2003
1998: SAI India was conferred the Jorg Kandutch Award by Congress of INTOSAI (INCOSAI) in
recognition of important achievements and contributions made in the field of Government Audit by
SAI India
1999: CAG constituted an Audit Advisory Board l Voucher Level Computerisation was introduced
2000: CAG became External Auditor of International Maritime Organisation for 2000-2012 and UN
World Tourism Organisation for 2000-2015

19
2.1 About SAI India
The Comptroller & Auditor General of India (CAG) and the Indian Audit and
Accounts Department (IA&AD), functioning under him together comprise the Supreme
Audit Institution (SAI India) which is a unified audit mechanism in the federal set up
under the Constitution of India. In the Constitutional scheme of checks and balances in
a Parliamentary democracy, this mechanism is designed to ensure accountability of the
executive to the legislature. Audit is an indispensable part of a regulatory system, the aim
of which is to ascertain compliance with the accepted standards of prudent management
of public finances. Senior functionaries of SAI India, representing the CAG in the States,
are called Principal Accountants General/Accountants General.
The Parliament/State Legislatures approve the annual budgets, as well as
supplementary appropriations and authorise the Government to collect taxes. There are
financial rules to ensure standards of propriety, regularity and probity in managing public
funds. Government Departments and other public bodies are expected to follow these
rules and adhere to the framework prescribed therein, when they receive and spend
public money. The spending Departments are accountable to the Parliament and State
Legislatures for both the quantity as well as the quality of expenditure incurred by them.
Articles148to151oftheConstitutionofIndiaprescribeauniquerolefortheCAG
in assisting the Parliament in enforcing the legislative accountability of the Government
2
Mandate of SAI India
Chapter

20
SAI INDIA
Departments. CAG audits the accounts of both, the Union and State Governments, and
also compiles the accounts of the State Governments.
The role of CAG assumes great significance in view of our federal multi party
democracy, wherein both the Union and State Governments are responsible for the
formulation and implementation of a large numberof schemes involving substantial public
resources. There has also been a sustained emphasis, through the National e-Governance
Plan (NeGP) and the Digital India Programme, on moving towards e-governance solutions,
involving delivery of public services to citizens using the digital mode. Another paradigm
shift is the Direct Benefit Transfer (DBT) platform of Government of India with the State
Governments for direct transfer of benefits to beneficiaries under various Government
Schemes and Programmes using Information and Communication Technology (ICT),
with necessary process reengineering to minimise intermediary levels and to reduce
delay in payments to intended beneficiaries with the objective of attenuating pilferage
and duplication. In response, SAI India is also continuously engaged in reexamining and
evolving our processes, infrastructure and capacities to ensure that the CAG’s mandate
is effectively discharged in the emerging governance models and information technology
driven platforms.
Proper accounting and auditing of Panchayati Raj Institutions (PRI) has been
an area of concern for successive Central Finance Commissions. Accordingly, we have
focused on pro-active measures for augmenting capacity building of Local Fund Auditors/
Examiners of Local Funds and hand holding of State organisations while also engaging
with stakeholders in an effort to enhance good governance at the grass root level.

23
2.2 Our Vision, Mission and Core Values
VISION
Mission
Core Values
Our Vision represents what we aspire to become:
Continue to provide independent and credible assurance
on public resources and be a global leader in public sector
auditing.
Our Mission enunciates our current role and
describes what we are doing today: Mandated by the
Constitution of India, we promote accountability, transparency
and good governance through high quality auditing and
accounting and provide independent and timely assurance to
the Legislature, the Public and the Executive, that public funds
are being collected and used effectively and efficiently.
Our Core Values are the fundamental beliefs that
guide our institution and our people
Institutional values: Mandating professional standards,
objective and balanced approach, independence and
transparency.
People values: Ethical behaviour, integrity, professional
competence, fairness and social awareness.

24
SAI INDIA
2.3 Independence of SAI India
The Constitution of India provides for independence of CAG from the executive
branch of the Government of India and the States. Articles 149 and 150 provide for the
duties and powers of CAG. Article 151 prescribes that audit reports relating to the Union
and the State Governments are to be submitted to the President of India/ Governor of
the State, to be placed before the Parliament or State Legislatures. CAG is an independent
Constitutional authority who is neither part of the Executive, nor of the Legislature.
The Constitution enables independent and unbiased audit by CAG by providing
for:
• Appointment of CAG by the President of India;
• Special procedure for removal of CAG, as applicable to a judge of the
Supreme Court;
• Salary and expenses of CAG not being subject to vote of Parliament; and
• MakingCAGineligibletoholdanyotherGovernmentofficeaftercompletion
of the term.
The Constitution further provides that the conditions of service of persons
serving in SAI India and the administrative powers of CAG shall be such as may be
prescribed by rules made by the President, after consultation with CAG.
Speech of Dr. Rajendra Prasad, the first President of India, 21 July 1954
‘The CAG has the power to call to account any officer, however highly placed,
so far as the State moneys are concerned. Hence he should be provided with all
the necessary facilities to enable it to function in a way calculated to ensure the
discharge of the duties allocated to it in the best possible manner’

25
2.4 Our Accounts Mandate
The CAG’s (Duties, Powers and Conditions of Service) Act, 19711
(CAG’s
DPC Act, 1971), promulgated in exercise of powers conferred by the Constitution of
India, provides for compilation of accounts of the State governments by CAG. Besides
compiling the accounts, CAG is responsible for preparing and submitting the accounts to
the President, Governors of States and Administrators of Union Territories (UTs) having
Legislative Assemblies. He may also give information and render assistance, related to
preparation of the accounts. CAG compiles accounts of the State Governments from the
subsidiary accounts submitted by treasuries and other officers of the State Governments.
We raise an alarm if monies are being drawn in excess of authorisation. We actively
monitor expenditure patterns and issue advice on excesses, surrenders and lapses of
funds.
The Union Government is authorised, after consultation with the CAG, to frame
rules, for maintenance of accounts by the Union and State Government Departments,
including the manner in which initial and subsidiary accounts are to be kept by the
treasuries, offices and departments rendering accounts to audit and accounts offices.
2.5 Our Audit Mandate
2.5.1 CAG’s DPC Act, 1971
The audit mandate of CAG is defined in the CAG’s DPC Act, 1971 and certain
other laws enacted by the Parliament. CAG has the mandate to audit and report upon:
• All receipts payable into and expenditure from the Consolidated Fund of
the Union and the State Governments;
• All financial transactions in emergencies, outside the normal budget (called
the Contingency Fund);
• InflowsandoutflowsofprivatemoniesofthepublicheldbytheGovernment
as a trustee or banker (called Public Accounts), at the Central, as well as at
the State levels;
• All trading, manufacturing, profit and loss accounts, balance sheets and
other subsidiary accounts kept in any Government Department;
1
Sections 10, 11, & 12 of CAG’s DPC Act 1971

26
SAI INDIA
• All stores and stock accounts of all Government offices and Departments;
• Accounts of all Government companies and any other company as defined
in the Companies Act 2013;
• Accounts of all Regulatory Bodies and other statutory authorities/
corporations, where the governing laws provide for their audit by the CAG;
• Accounts of all autonomous bodies and authorities substantially financed
by the public exchequer;
• Accounts of a body or authority whose audit is specifically entrusted to
CAG, in public interest, by the President/ Governor /Lt. Governor, under
enabling provisions of the CAG’s DPC Act, 1971.
The following special responsibilities have also been entrusted to
the CAG:
• On the recommendations of successive Central Finance Commissions, the
States have entrusted, to the CAG as per provisions of the CAG’s DPC Act,
the role of providing Technical Guidance and Support (TGS) to the Local
Fund Audit Wings of State Governments, who are the Primary Auditors
of Local Bodies (LBs). The components of TGS include inter alia support
and hand holding of Primary Auditors for setting of auditing standards,
audit planning, adoption of improved audit methodologies and capacity
building. In addition, utilisation of funds received as grants-in-aid from
Central/State Governments and implementation of Central/ State Schemes
by LBs are also audited. Further, all receipts and expenditure of those LBs
are audited which are either substantially financed from the Consolidated
Fund of India/ States or where such audit has been entrusted by the State
Governments.
• Conducting a review of the performance of the Union Government
in meeting its obligations under the Fiscal Responsibility and Budget
Management Act.
• Certifying the net proceeds of Central taxes/duties, which are shareable
with the States.
2.5.2 Mandate through judicial pronouncement
CAG has the authority to audit the accounts of even a private company,
not normally within the audit mandate of CAG, if the company has been allowed the
commercial use of scarce natural resources under the terms of license, which require the

27
company to share a part of the revenue so generated with the government. This authority
was upheld by the Hon’ble Supreme Court of India in its judgment dated 17 April 2014
pertaining to the companies providing telecom services.
2.6 Our Powers
2.6.1 Powers to Audit
In carrying out the above mentioned duties, CAG has powers2
to:
• inspect any office or organisation subject to his audit;
• call for any records, papers, documents from any audited entity;
• decide the extent and manner of audit;
• examine all transactions and question the executive; and
• dispense with, when circumstances so warrant, any part of detailed audit
of any accounts or class of transactions and to apply such limited check in
relation to such accounts or transactions as he may determine.
2.6.2 Powers of Delegation
CAG can delegate his powers, under the provisions of the CAG’s DPC Act, 1971
or any other law, to any officer of his Department, with the exception that, unless the CAG
is absent on leave or otherwise, no officer can submit an audit report to the President or
the Governor on his behalf.
2.6.3 Powers to make regulations
CAG can make regulations for effecting the provisions of the CAG’s DPC Act,
1971, in so far as they relate to the scope and extent of audit, including laying down,
for the guidance of Government Departments, the general principles of Government
accounting and the broad principles in regard to audit of receipts and expenditure.
In view of significant developments in the environment wherein public auditors
operate such as governance paradigm, changes in government priorities, extensive
deployment of IT tools in service delivery and data environment of the government, new
form of institutional set ups, judicial interpretation of the CAG’s mandate, scope and
applicability of public audit provisions etc., the ‘Regulations on Audit and Accounts’ issued
in 2007 under the above mentioned powers were reviewed and have been substituted by
Regulations on Audit and Accounts (Amendments) 2020.
2
Sections 18,21,22,23 & 24 of CAG’s DPC Act 1971

28
SAI INDIA
2.7 Different types of Audit conducted by SAI India
CAG’s powers extend to determining the scope, extent, methodology and
approach to be adopted in conducting any audit. We conduct Financial Audit, Compliance
Audit and Performance Audit or any combination of these types of audits, in accordance
with our mandate, standards and guidelines framed by the CAG in this regard.
2.7.1 Financial Audit
Financial Audit deals with determining whether an entity‘s financial statements
and information are properly prepared, complete in all respects and are presented with
adequate disclosures in accordance with the prescribed financial reporting and regulatory
framework; and is accomplished by obtaining sufficient and appropriate evidence to
enable the auditor to express an opinion as to whether the financial statements and
information represent a true and fair view of the entity‘s financial situation and are free
from material misstatement due to fraud or error.
2.7.2 Compliance Audit
Compliance audit is an independent assessment of whether a given subject
matter (an activity, financial or non-financial transaction, information in respect of an
entity or a group of entities) complies in all material respects with the applicable laws,
rules, regulations, established codes etc. and the general principles governing sound
public financial management and the conduct of public officials.
2.7.3 Performance audit
Performance Audit is an independent, objective and reliable examination of
whether Government entities, institutions, operations, programmes, funds, activities
(with their inputs, processes, outputs, outcomes and impacts) are operating in accordance
with the principles of economy, efficiency and effectiveness and whether there is room
for improvement.

29
3.1 Organisation of SAI India
TheCAGdischargeshisdutiesthroughtheIndianAudit&AccountsDepartment.
SAI India is a knowledge based and human resource driven organisation. It consists of
approximately41,700employees.TheCAG’sofficelocatedinNewDelhiistheheadquarters
of SAI India. During 2021-22, it was supported by 137 field offices (132 offices spread
across India and five offices located abroad). Three National Training Institutes and 12
Regional training Institutes/Centres provide the capacity building support.
The Office of the Comptroller and Auditor General of India in New Delhi directs,
monitors and controls all activities connected with audit, accounts and entitlement
functions of SAI India. It lays down the long term vision, mission and goals of SAI India. It
also sets the policies, auditing standards and systems and carries out the final processing
and approval of all Audit Reports.
For carrying out these responsibilities, there are separate divisions dealing with
Accounts and Entitlement, Civil Audit, Commercial Audit, Defence Audit, Railway Audit,
Revenue Audit, State Governments Audit, Professional Practices, Strategic Management,
Administration of Personnel, Training, Communication, Inspection of field offices, Big
Data Management etc. These divisions are headed by the Deputy Comptroller and
Auditors General/ Additional Deputy Comptroller and Auditors General who report to the
CAG. They are assisted by Directors General, Principal Directors, Directors and Deputy
Directors, who are all senior level managers.
3
Organisation of SAI India
Chapter

30
SAI INDIA
Field offices located in different parts of the country are responsible for carrying
out the audit and accounts mandate of the CAG. The audit offices in London, Kuala Lumpur
and Washington DC conduct audit of the overseas missions of the Government of India,
while our external audit offices in Rome and Geneva carry out the audit of the United
Nations’ Food and Agricultural Organisation and World Health Organisation, respectively.
Our verticals are structured according to the functions we perform viz. Audit of
Union Government, Audit of State Government, Accounts and Entitlement and Training
& Human Resources. The organisational set up is depicted in the diagram below:
The Organisation chart of the Office of the CAG is available at https://cag.gov.in/content/
organisation-chart. The web link to each of the field offices is available at https://cag.gov.
in/en/home/our-office/.
# DAI: Deputy Comptroller and Auditor General
@ ADAI: Additional Deputy Comptroller and Auditor General
* ADAI (SR) is holding additional charge of DG (iCISA)
$ one RTC is not a separate office.
3 National Training Institutes and
12 Regional Training Institutes/Centers$
H . R . M . & O T H E R S
2 External Audit
offices
DAI (HR, IR &
Coordination)
DG
(iCISA)*
DG
(iCED)
DG
(NAAA)
ADAI
Staff
ADAI
Training
ADAI
(IR &
Coordination)
ADAI
(Inspection)
L
o
c
a
l
B
o
d
i
e
s
A
u
d
i
t
4
0
o
ffi
c
e
s
f
o
r
A
u
d
i
t
o
f
S
t
a
t
e
G
o
v
e
r
n
m
e
n
t
A
U
D
I
T
V
E
R
T
I
C
A
L
5
2
o
ffi
c
e
s
f
o
r
A
u
d
i
t
o
f
U
n
i
o
n
G
o
v
e
r
n
m
e
n
t
2
9
o
ffi
c
e
s
A
c
c
o
u
n
t
s
&
E
n
ti
t
l
e
m
e
n
t
s
A
C
C
O
U
N
T
S
V
E
R
T
I
C
A
L
S
t
a
t
e
A
u
d
i
t
U
n
i
o
n
A
u
d
i
t
ADAI (LB)
DAI
(GA &
GASAB)
ADAI
(GASAB)
DAI (NR)
ADAI@
(CR)
ADAI (ER)
ADAI (NER)
ADAI (NCR)
ADAI (SR)
ADAI (WR)
DAI#
(CRA)
DAI (Comm)
DAI (Def)
DAI (F&C)
DAI (RC)
DAI (Rly)
CAG

31
3.2 Comptroller and Auditor General’s Audit Advisory
Board
There is an Audit Advisory Board, to advise the CAG on matters relating to audit
and suggest improvements in the performance and focus of audit within the framework
of the Constitutional mandate of the CAG.
The Board consists of nominated external members who are eminent persons
in diverse fields, as well as Deputy Comptroller and Auditors General of the SAI India.
The members of the Board function in an honorary capacity. The Audit Advisory Board
is reconstituted every two years. The first Audit Advisory Board was constituted in 1999.
Since then, the Board has been reconstituted nine times (2001, 2003, 2006, 2009, 2011,
2013, 2015, 2018 and 2021). The tenth Audit Advisory Board constituted in April 2021 for
the biennium 2021-23, has the following members:

32
SAI INDIA
Mr. Girish Chandra Murmu
Comptroller and Auditor General of India
Ex-officio Chairman
Mr. Ashok Gulati
Agricultural Economist
Member
Dr. Devi Prasad Shetty
Chairman and Executive Director, Narayana Health
Member
Mr. H. K. Dash
Retired IAS Officer
Member
Prof. Makarand R. Paranjape
Academician
Member
Mr. Manish Sabharwal
HR Consultant
Member
Mr. Maroof Raza
Retired Indian Army Officer and National Security Analyst
Member
Mr. Nitin Desai
Distinguished Fellow, TERI, UN retd.
Member
Dr. Ravinder H. Dholakia
Economist
Member
Mr. S.M. Vijayanand
Retired IAS officer
Member
Mr. Suresh N. Patel
Central Vigilance Commissioner
Member
All Deputy C&AsG Ex-officio Members

33
3.3 State Audit Advisory Boards
On similar lines, Audit Advisory Boards have been constituted in the States,
under the chairmanship of the concerned Principal Accountants General/Accountants
General of Audit Offices. Other Accountants General in the states are ex-officio members
of the Board. External members are nominated from amongst eminent academicians,
professionals and retired Civil Servants. The objective of the State Audit Advisory Boards
is to enhance the effectiveness of our audits, by providing a forum for professional
discussion between the senior management of the audit offices and knowledgeable
and experienced professionals from varied fields. The Boards meet twice a year and are
reconstituted biennially.
Members of the Tenth Audit Advisory Board of CAG

35
4
Training Infrastructure
Chapter
4.1 Training infrastructure of SAI India
The training infrastructure of SAI India comprises three Central Training
Institutes, 10 Regional Training Institutes and two Regional Training Centres.
4.1.1 National Academy of Audit and Accounts, Shimla
NAAA, Shimla
The National Academy of Audit and
Accounts (NAAA) is the apex training institute
of SAI India, mandated to conduct the induction
trainingoftheOfficerTraineesoftheIndianAudit
& Accounts Service (IA&AS) recruited through
the Civil Services Examination conducted by the
Union Public Service Commission and in-service
training for officers from IA&AS and other All
India and Central Civil Services.
NAAA nurtures the new recruits into
a cadre of competent officers, well-versed with
contemporary best practices in the field of
auditing, accounting, public administration and

36
SAI INDIA
good governance. The residential induction training at the Academy lasting for 89 weeks
commences around mid-December every year and is organised in a sandwich pattern
of Phase-I, On the Job Training (OJT) and Phase-II training. Phase-I training is bifurcated
into Semester-I & II with focus on different aspects of Government and Commercial
Accounting; Public Audit including Compliance, Performance, Financial and Information
Systems Audit; Public Finance and Policy; Administration and Public Expenditure; Costing
and Financial Management. Classroom training is supplemented by On the Job training
for 32 weeks in select field offices across the country for providing hands on experience
of working in the field formations of SAI India.
The Officer Trainees are also sent to other academic institutions of excellence
for domain specific knowledge including at Indian Institutes of Management, National
Institute of Public Finance and Policy, Reserve Bank of India, NITI Aayog, Securities and
Exchange Board of India, Tata Institute of Social Sciences and Parliamentary Research and
Training Institute for Democracies.
During the training at the Academy, focus is also given on the development
of interpersonal skills and personality development of the Officer Trainees through
sports, cultural, social outreach, and other extra-curricular activities. There are various
committees run by the Officer Trainees. Major activities organised by these committees
Yarrows, Shimla

37
include bringing out ‘Academy Calling’ and ‘Yarrows Dew’ magazines, organisation
of annual photography cum short video competition cum exhibition for the entire SAI
India known as ‘Abhivyakti’, annual debate competition ‘Battle of Ideas’, annual quiz
competition ‘Quiriosity’, running of Crèche for children of migrant labourers, organisation
of blood donation and health checkup camps, organising various sporting events and
cultural programmes.
NAAA also offers mid-career and in-service training to IA&AS officers and the
officers of other departments. NAAA carries out specialised programmes for All India
Services and Central Services such as the Indian Civil Accounts Service, Indian Defence
Accounts Service, Indian Railway Accounts Service, Indian Railway Traffic Service, Indian
Postal Service etc.
4.1.2 International Centre for Information Systems and Audit
(iCISA)
iCISA at NOIDA was
established in March 2002 and is
an ISO 9001:2008 and ISO 27001
certified institution, which strives for
ensuring quality systems in training
and alignment of IT audit with global
best practices. iCISA is a designated
Global Training Facility of the INTOSAI
Working Group on IT Audit.
iCISA is mandated to impart
quality training to officers of SAI India.
In addition, iCISA trains senior officers
from various services viz. Indian
Administrative Service, Indian Forest
Service, Armed Forces, Parliament
Secretariat and Central Autonomous
Bodies, as well as other SAIs.
iCISA, NOIDA

38
SAI INDIA
iCISA’s mandate extends to capacity building in the area of Information
Technology and e-Governance. iCISA collaborates with institutions and agencies such as
Information Systems Audit and Control Association (ISACA) India chapter, leading audit
firms, Indian Computer Emergency Response Team (CERT-In), Data Security Council of
India (DSCI) and Standardisation Testing and Quality Certification (STQC) Directorate of
Ministry of Electronics & Information Technology. An MOU has been signed with STQC
Directorate for capacity building on Information Systems Security for SAI India officials.
iCISA conducts International Training Programmes which are of four-weeks
duration. The Ministry of External Affairs provides scholarships for these programmes
under the Indian Technical and Economic Co-operation (ITEC) Plan. The broad objectives
of these programmes are:
• To promote bilateral co-operation between the Government of India,
which funds these training programmes, and other Governments;
• To provide a platform at the International level for various SAIs to come
together and share their ideas and experiences in various fields of audit;
and
• To provide an opportunity to participants from different SAIs to get an
exposure to contemporary best practices in audit and focus on emerging
audit concerns.
Senior and middle level officers from various SAIs and officers of Governments
of countries in Africa, Central Asia, South East Asia, Far East, Middle East, Pacific and East
European region participate in these international training programmes.
iCISA also contributes to capacity building of other SAIs under Bilateral Training
Programmes. iCISA has designed and delivered customised training programmes for
participants from several countries viz., Afghanistan, Bhutan, Chile, Eswatini, Iraq, Jamaica,
Maldives, Nepal, Oman, Uganda and Vietnam. The bilateral training programmes are an
effective instrument for deepening ties between the SAIs and respective countries.
4.1.3 International Centre for Environmental Audit & Sustainable
Development (iCED)
iCED at Jaipur was established in May 2013 and is a recognised Global Training
Facility of the INTOSAI on Environment Audit. Its campus has the unique distinction of

39
being the country’s first ever GRIHA (Green Rating for Integrated Habitat Assessment)
five-star rated green building.
iCEDprovideshandholdingsessionsforconductingenvironmentauditswherein
it assists audit teams in selection of criteria, identifying audit objectives, identifying
sources of data and participating while establishing criteria-condition-cause-conclusion-
recommendation trail to ensure that the reports are comprehensive and reflect a
macro-picture. iCED, through its institutional partnerships, has brought together expertise
from various fields to facilitate an inter-disciplinary approach in auditing.
iCED, Jaipur
iCED Campus

40
SAI INDIA
RTI Shillong
RTI Nagpur
4.1.4 Regional Training Institutes/Centres
SAI India has 10 Regional Training Institutes (RTIs) and two Regional Training
Centres (RTCs) located across the country to provide extensive training in Accounts, Audit,
Administration, Management and Information Technology for Senior Audit/Accounts
Officers, Group B and C cadres of SAI India which constitute Supervisory cadre and
Audit & Accounts Staff cadre. The institutes are located in Chennai, Hyderabad, Jaipur,
Jammu, Kolkata, Mumbai, Nagpur, Prayagraj, Ranchi and Shillong. Two RTCs are located in
Bengaluru and Delhi.
The RTIs/RTCs function as Knowledge Centres in respect of the specific areas
of specialisation assigned to each of them. As Knowledge Centres, the RTIs/RTCs prepare
Structured Training Modules (STMs), case studies and other training materials on topics
pertaining to their designated areas of specialisation. They conduct All India Training
Programmes in the area of specialisation allotted to them.

41
RTI Jammu
RTI Jaipur
RTI Prayagraj
RTI Mumbai

43
5
How we manage our resources
Chapter
5.1 FinancialManagement-ComponentsofExpenditure
We spent ₹5,352.06 crore in 2021-22. A major share of total expenditure
(88.55 per cent) was incurred directly on our human resources – 85.45 per cent on
‘Salaries’ and 3.10 per cent on ‘Travel’. Component wise details of expenditure are given
below:
Components of Expenditure (in ` crore)
4,573.07
Salaries Travel
Expenses
Office
Expenses
Misc.
Expenses
Rent, Rates
& Taxes
166.12 153.79 390.56 68.52

44
SAI INDIA
5.1.1 Expenditure pattern on functional basis
Civil Audit Offices accounted for the largest share of expenditure followed
by Civil Accounts and Entitlement Offices. Overall we spent about 65.03 per cent on
Audit (excluding Headquarters). The total expenditure on the Civil Accounts Offices was
approximately 29.85 per cent.
Category of office Actual Expenditure
(₹ in crore)
Percentage of
Expenditure
Headquarters office 187.98 3.51
Civil Audit Offices 2650.34 49.52
Commercial Audit Offices 236.50 4.42
Finance & Communication Audit Offices 154.72 2.89
Railway Audit Offices 273.96 5.12
Defence Audit Offices 127.95 2.39
Civil Accounts offices 1597.44 29.85
UN Audit(Office of Directors of External
Audit at UN New York, WHO-Geneva and
FAO-Rome)
4.18 0.08
Overseas Audit offices 32.62 0.61
NAAA, Shimla 17.32 0.32
iCED, Jaipur 10.81 0.20
iCISA, NOIDA 9.42 0.18
Regional Training Institutes 34.84 0.65
Departmental Canteen 13.98 0.26
Total 5352.06 100
Table I.5.1

45
5.2 Human Resources Management
People are our key assets as we are a knowledge based organisation.
ISSAI 40 prescribes that the SAI should establish policies and procedures designed to
provide it with assurance that it has adequate number of competent and motivated staff
to discharge its functions effectively.
Our manpower is broadly classified into four categories:
Against a sanctioned strength of 61,121, 68.18 per cent of the staff is presently
working in the Department. In SAI India, 43.91 per cent people are at different managerial
and supervisory levels and 48.75 per cent people constitute audit and accounts staff. Only
7.34 per cent of the total strength provides support function.
Category Numbers of Officers/Staff
(as on 1 March 2022)
IA&AS 553
Supervisory Cadre 17,745
Audit & Accounts Staff 20,320
Multi-Tasking Staff 3,057
Total 41,675
Our
People 42.58%
48.75%
7.34%
1.33%
IA&AS
Supervisory
Cadre
Audit &
Accounts Staff
Multi Tasking
Staff

46
SAI INDIA
Indian Audit & Accounts Service (IA&AS) Officers are recruited through Union
Public Service Commission. The top, senior and middle management levels of SAI India
are manned by officers from this service. In addition, Senior Audit/Accounts Officers
are also inducted into this service by promotions. Together they constitute the Group A
service in Government of India.
Supervisory Cadres - The Gazetted supervisory cadre consists of Senior Audit/
Accounts Officers (Group A - Gazetted), Assistant Audit/Accounts Officers (Group B -
Gazetted), and Supervisors (Group B- Non-Gazetted). They form the critical operational
management in our hierarchy. Assistant Audit /Accounts Officers come through either
the direct recruitment process or are promoted to the cadre after passing all India
departmental examinations popularly known as the Subordinate Audit/Accounts Services
Examination. They are recruited directly by the Staff Selection Commission.
Audit & Accounts Staff - Data Entry Operators (DEOs), Clerks, Auditors/
Accountants, Senior Auditors/Senior Accountants and Assistant Supervisors form this
cadre and constitute 50 per cent of our total manpower. They are recruited by the Staff
Selection Commission or promoted from feeder cadre.
Multi-Tasking Staff - All support functions in various SAI India’s offices are
carried out by multi-tasking staff.
5.2.1 Qualifications
The IA&AS cadre has 14 doctorates, 274 post graduates and 260 graduates. Out
of them 87 are professionally qualified1
officers. Officers and staff in the non-IA&AS cadre
of Group ‘A’, ‘B’ & ‘C’ are also well qualified. We have 68 doctorates, 4,019 professionally
qualified personnel, 5,116 post graduates and 22,324 graduates in these cadres.
5.2.2 Recruitments
Optimal staffing in the field offices continued to be a focus of the department
during2021-22.RequisitionsplacedwithStaffSelectionCommissionfordirectrecruitment
to the posts of Assistant Audit Officers, Divisional Accountants, Junior Hindi Translators,
1
Engineers, Doctors, MBA, CA, ICWA, CFE, CIA, CISA etc.

47
Auditors, Accountants, Stenographers have materialised during 2021-22. This resulted in
addressing the deficiency in Group ‘B’ and ‘C’ cadre to a considerable extent.
• We recruited 788 persons in 2021-22. The largest number of recruitments
took place for Assistant Audit Officers (296), Auditors (199), Divisional
Accountants (150), Stenographer Grade-II (50), Data Entry Operator Grade
‘A’ (48) and Stenographer (45).
• Consultants were appointed on specific requirement basis so that the
working in the field offices is not affected due to shortage of staff, if any.
5.2.3 Gender Balance
The table below shows the gender profile of the organisation in different
cadres.
While the proportion of women was 16.10 and 15.41 per cent in case
of supervisory cadre and Multi-Tasking Staff respectively, it was higher in IA&AS at
28.75 per cent.
5.2.4 Staff Associations
We have 225 Staff Associations and five All India Federations representing audit
and accounts staff and supervisory cadres. State level meetings were periodically held by
the Principal Accountants General/Accountants General with the concerned field level
Service Associations.
Category Women Men Percentage
of women
IA&AS 159 394 28.75
Supervisory Cadre & Audit/ Accounts Staff 6,129 31,936 16.10
Multi-Tasking Staff 471 2,586 15.41
Total 6,759 34,916 16.22

Statue of
Dr. B.R. Ambedkar in the
CAG office premises

49
2
Fulfilling our
mandate
SECTION
Chapter 1
Fulfilling our Audit Mandate
Chapter 2
Fulfilling our Accounts Mandate

51
1.1 Our Audit Process
The audit process at the SAI India level and the individual audit office level
follows several stages, as depicted in the following diagram:
1
Fulfilling our Audit
Mandate
Chapter
Strategic Audit Plan
Annual Audit Plans
Planning Individual Audits
Conducting Audits
Reporting on Audits

52
SAI INDIA
The Strategic Plan provides the overarching framework for planning in the SAI
India on all significant areas for a longer time horizon. For preparing the Strategic Plan for
SAI India for 2023-30, a Committee has been constituted in February 2022.
Annual Audit Plans developed by each field office contain the details of the
individual audits planned to be carried out during the annual audit cycle. The annual plan
exercise takes into account the periodicity of audit, as determined by audit mandate;
risk assessment; and other relevant parameters, including significance of the issue or
unit and human resources. The selection of topics for Performance Audit is guided by
various considerations such as risk assessment, materiality and significance, visibility
of the subject, past audits, estimated impact, coverage and stage of the programme
development, etc.
We also develop detailed audit programmes describing the audit teams to be
deployed, the time allotted and the exact dates of the audit. The audit teams conduct
audit based on prescribed audit norms, using different techniques for collecting reliable,
competent and sufficient audit evidence to support their audit conclusions. They are
guided by the auditing standards of SAI India and other instructions issued from time to
time.
On completion of an audit, an Inspection Report is issued to the audited entity.
Audit findings of high value, or the ones that may have a significant impact, are further
processed for inclusion in the Audit Reports of the CAG for laying in the Parliament/State
Legislatures at the Union and State levels.
Theauditedentitiesareexpectedtotakeactiononthebasisoftheshortcomings
pointed out and the recommendations made in the Audit Reports and send Action Taken
Notes on the audit observations included in the Audit Reports. The Audit Reports issued
by the CAG at the Union and State levels, are discussed by the respective Public Accounts
Committees (PAC) and Committees on Public Undertakings (COPU). Action taken on
audit observations and recommendations is also examined and reported upon during
subsequent audits.
The Audit Committees constituted by audited entities are a mechanism for
follow up of audit findings. The Audit Committees, consisting of officials from the audited

53
entity and the SAI India, monitor the follow-up process, so as to bridge any perception gaps
and to increase levels of communication, besides discussing and resolving outstanding
audit observations.
1.2 Highlights of the Annual Audit Plan 2021-22
The Annual Audit Plan 2021-22 accorded priority to the mandatory Financial
Attest Audit related assignments. Our coverage of Compliance and Performance audits
was guided by risk assessment and optimal utilisation of our remaining resources, with
emphasis on quality and timeliness of Audit Report.
After holding several interactions with stakeholders and experts, All India
Performance Audits on ‘Swadesh Darshan Scheme’ and ‘Pre-Post Matric Scholarship
Scheme /NSAP’ were initiated during the year. Besides this, we took up a cross cutting
audit on Public health infrastructure and management of health services across States.
WealsocontinuedwiththecrosscuttingauditssuchasAuditofefficacyofimplementation
of the 74th
Constitutional Amendment Act, Performance of Discoms- pre and post UDAY
and Waste Management in Urban Areas/Smart cities in some States.
1.3 Key Results and Achievements in Audit
KeyfunctionalareasoftheSAIIndiaincludeauditoftheMinistries/Departments
of the Union and State Governments, Public Sector Undertakings (PSUs) and Autonomous
Bodies under them and Local Bodies. SAI India conducts Financial, Compliance and
Performance audits in each of these functional areas.
The main outputs of these audits are Inspection Reports and Audit Certificates
with Separate Audit Reports that are issued to the management of the audited entity.
Significant audit observations reported in these audit products are included in Audit
Reports of the CAG, which are placed before the Parliament/State Legislatures under
provisions of Article 151 of the Constitution of India. Ensuring the quality and timeliness
of these audit products is a key result area of the SAI India. In the following paragraphs,
we report on the audits performed by us and the highlights of our audit products during
2021-22.

54
SAI INDIA
1.3.1 Financial Attest Audit
Besides the Financial Attest Audit of annual accounts of the Union and State
Governments, Autonomous Bodies and PSUs, the SAI India also certifies the expenditure
incurred on externally aided projects, as part of aid agreements.
During 2021-22, we examined 7,912 accounts of Union and State Governments,
PSUs, Autonomous Bodies, externally aided projects and other entities and issued an
audit certificate for each account. We issued 4,911 audit certificates within the prescribed
time frame.
The delays in certification of accounts were on account of receipt of incomplete
accounts; revision of accounts; late receipt of accounts from Autonomous Bodies,
Companies and Statutory Bodies; procedural delays; delays due to non-receipt of records
for verification of accounts and non-settlement of observations; delays in receipt of
replies to audit observations; longer time taken in discussion with management on critical
issues and bunching of accounts, etc. COVID-19 outbreak also contributed to the delays.
1.3.2 Compliance Audits
1.3.2.1 Audit Coverage
A total of 32,884 units were planned for audit during 2021-22. Against this,
28,964 units were audited during the year. The graph below shows that 89.23 per cent
of the planned audits at the Union level and 87.40 per cent of the planned audits at the
State level were completed.
Accounts relating to No. of accounts
examined
On time Audit
Certification
Central/State Government 298 267
PSUs (Central/State) 1,664 1,032
Autonomous Bodies (Central/State) 1,386 386
Externally Aided Projects (Central/State) 201 142
Others (Central/States)1
4,363 3,084
Total 7,912 4,911
1
Others’ include Gram Panchayats and proforma accounts of departmental undertakings of
commercial nature including Centrally Sponsored Schemes

55
Audit Coverage
12105
10802
20779
18162
Units Planned
Units Audited
Units Planned 12105 20779
Union States
Units Audited 10802 18162
1.3.2.2 Inspection Reports
Inspection Reports (IRs) are issued on completion of every audit to the
audited entity. Of the 28,964 units audited during the year, IRs in case of 15,417 units
(53.23 per cent) were issued in 2021-22. In addition, 3,241 IRs were also issued for the
units audited prior to 2021-22.
At the Union level, 99.66 per cent of the IRs were issued on time, i.e., within
30 days, while at the State level, the on-time performance was 73.32 per cent.
Inspection
Reports
issued for
Units actually
audited during
the year
Inspection
Reports
issued
for units
audited prior
to 2021-22
Total
Inspection
Reports
issued
during the
year
Inspection
Reports
issued
within 30
days
Percentage
of Inspection
Reports
issued
within 30
days
Union 5,680 879 6,559 6,537 99.66
States 9,737 2,362 12,099 8,872 73.32
Total 15,417 3,241 18,658 15,409 82.59

56
SAI INDIA
Significant audit observations made during compliance audit are included in the
Compliance Audit Reports of CAG. A total of 2,547 audit observations (849 in the Union
Audit Reports and 1,698 in the State Audit Reports) were included in the Audit Reports
approved during 2021-22. Important topics for Standalone Compliance Audit Reports
were Water Injection Operations in Western Offshore in ONGC and Administration of
Nazul Lands by Land and Development Office.
At the Union level, 362 of the 849 audit observations were accepted and
27 were partially accepted by the audited entities. At the State level, of the 1,698 audit
observations, 434 were accepted and 112 were partially accepted by the audited entities.
1.3.3 Performance Audits
Continuing with the approach adopted in 2020-21, the areas of audit which
were outcome focused were identified and selected centrally. As mentioned in Para 1.2,
the important topics taken up for audit were ‘Swadesh Darshan Scheme’, ‘Pre-Post Matric
Scholarship Scheme/NSAP’, Public Health Infrastructure and management of health
services across States, Audit of efficacy of implementation of the 74th
Constitutional
Amendment Act, Performance of Discoms- pre and post UDAY and Waste Management
in Urban Areas/Smart cities.
In addition, Performance Audits were conducted on Ground Water
Management and Regulation, Setting up of new Indian Institutes of Technology (IITs),
Advance Authorisation Scheme, Implementation of Phase-III, Delhi Mass Rapid Transit
System by DMRC, Material and Components Group of Ordnance Factories, Selection
and Training of Officers in Indian Army, Inventory Management in Ordnance Services,
Construction and Estate Management in DRDO, Functioning of UIDAI, Functioning
of District Hospitals, Functioning of Karnataka State Road Safety Authority, Dial 100
Emergency Response System, Land Acquisition and Allotment of Properties, Centralised
Information Technology Billing System Being Operated by State Power Utilities, Prime
Minister’s Development Package, Preparedness and Response to Floods in Kerala and
Management of Storm Water in Urban area.
1.3.4 Audit Reports of the CAG
Article 151 of the Constitution envisages that the CAG will prepare and
submit reports to the President or the Governor for laying in the Parliament or the State
Legislatures, as the case may be.

57
Between 2018-21, CAG approved, on an average, 105 Audit Reports annually
for laying in the Parliament/State Legislatures. During 2021-22, 165 Audit Reports, of
which 34 Reports were to be tabled in the Parliament and 131 in the State Legislatures,
were approved. Out of 165 Audit Reports, 21 Union Audit Reports and 119 State Audit
Reports were presented to the Parliament and the State Legislatures respectively, during
2021-22. Further, one Union Audit Report and 45 State Audit Reports approved in
2020-21 were also presented to the Parliament and State Legislatures respectively during
2021-22.
The Reports of the C&AG, after they are tabled in the Parliament/State
Legislatures, are placed in public domain at https://cag.gov.in/audit-reports.
1.3.5 Impact of Audit
1.3.5.1 Acceptance of Recommendations made by Audit
The status of recommendations made in the 165 Audit Reports approved
during 2021-22 was as under:
Thus, 2,144 recommendations were made in the 165 Audit Reports approved
during 2021-22 of which 558 recommendations were accepted by the audited entities.
1.3.5.2 Recoveries at the instance of Audit
Some of our audit observations pertain to under assessment of taxes or specific
loss to the exchequer, necessitating recoveries from the concerned parties. Recoveries
made at the instance of audit, during the year, are indicated below:
Audit Reports No. of Audit
Reports approved
during the year
Recommendations
made
Recommendations
accepted
Union Government 34 422 83
State&Union
Territory
Governments
131 1,722 475
Total 165 2,144 558

58
SAI INDIA
Recoveriesaccepted Recoveries effected
Union Government 16,777.06 1,113.29
State Government 8,793.68 1,861.73
Total 25,570.74 2,975.02
1.3.5.3 Impact of the Audit of Annual Accounts of PSUs
(i) Financial impact
In case of annual accounts of Government companies and corporations,
we conduct supplementary audit, under section 143(6) of the Companies
Act, 2013. Supplementary audit of accounts of 1,351 companies and
corporations (both Union and States) was conducted during 2021-22
and the impact of these audits on the accounts was: (a) amendment to
Notes to the Accounts: ₹49,089.53 crore (b) classification mistakes:
₹32,015.80 crore (c) changes in profit and loss: ₹13,694.18 crore and (d)
changes in assets and liabilities: ₹1,07,340.76 crore.
(ii) Revision in the Statutory Auditor’s Report
Based on audit enquiries issued during certification audit for the year
2020-21, the Statutory Auditor’s Reports were revised in case of Bharat
Electronics Limited (BEL), BEL Thales Systems Limited, Bharat Dynamics
Limited (BDL), Bharat Earth Movers Limited (BEML), Mishra Dhatu Nigam
Limited (MIDHANI) and Utkarsha Aluminium Dhatu Nigam Limited
(UADNL).
(iii) Changes in Accounting Policies/Notes to Accounts (Central Public Sector
Undertakings)
Management Letters and audit observations issued in the course of
supplementary audit had the following impact:
• Based on Management letter issued in October 2020, the Financial
statements of Hindustan Organic Chemicals Limited for the year
2020-21 were approved by the Board of Directors in June 2021 after
(i) excluding the accrued income in the cash flow statement, and
(ii) complying with the disclosure requirement of borrowing as per
Schedule III of Companies Act, 2013.
• Based on Management letter issued in January 2022, Haridwar Natural
Gas Private Limited adopted Policy of Useful life of an asset with regard
(` in crore)

59
to depreciation in line with provision of Companies Act, 2013.
• BEL Thales Systems Limited made disclosure of (i) deemed cost
and method of depreciation adopted and (ii) information related to
inventory in Notes to Accounts.
• BEML adopted/changed the Accounting policy regarding obsolescence
provision for R&D products.
• MIDHANI prepared the working guidelines for the accounting units for
capitalisation of assets.
• Hindustan Aeronautics Limited (HAL) prepared the Accounting Policy
on provision for Trade Receivable and Claims Receivable Outstanding
for more than five years.
• Guidelines were issued by BEL to all the Units for (i) maintaining
uniformity in methodology for creating provision for performance
warranty, and (ii) creating provision for accounting Exchange Rate
Variation claims.
• BEL Optronic Devices Limited made disclosure in Notes to Accounts
regarding (i) movement of provision of Corporate Social Responsibility
and (ii) adjustment under salaries and allowances.
• Based on the Management Letter issued in September 2020, on the
Financial Statements of Eastern Coalfields Limited (ECL) for the year
2019-20, Coal India Limited (CIL) formulated (March 2021) a uniform
accounting policy/ methodology of calculation of coal quality variance
to be followed by all subsidiaries.
• HMT Limited changed the Accounting Policy for considering all highly
liquid financial instruments which were readily convertible into known
amount of cash that are subject to an insignificant risk of changing
in value and having original maturities of three months or less from
the date of purchase, to be cash equivalents in place of 12 months or
less from the date of purchase. The company also adopted accounting
policy on non-moving inventory from the year ended 31 March 2021.
• Bhagyanagar Gas Limited made specific policy on non-moving stores
and spares for the year ended 31 March 2021.
• HMT Machine Tools Limited adopted accounting policy on
non-moving inventory for the year ended 31 March 2021 in line with
the accounting policy of holding company.

60
SAI INDIA
(iv) Changes in Accounting Policies/Notes to Accounts (States PSUs)
(a) Madhya Pradesh
• Based on the comments in Supplementary Audit of MP Paschim
Kshetra Vidyut Vitaran Company Limited, Indore, the amount of
interest paid to Rural Electrification Corporation on behalf of the
Government of Madhya Pradesh was started to be correctly shown
under Current Receivables from the Financial Year 2021-22.
• Based on the comments in Supplementary Audit of MP Madhya
Kshetra Vidyut Vitaran Company Limited, impact of ex-power
purchase cost per unit decided by MPERC was started to be
disclosed under Notes to Accounts from the Financial Year
2021-22.
(b) Tripura
Based on the Supplementary audit comments on the accounts of
Tripura State Electricity Corporation Limited for the year ended
31 March 2019, the management agreed to comply with the
requirement of (i) classification and disclosure of Fair Value
Measurement of Financial Assets and Financial Liabilities as per the
requirement of Ind AS-107, and (ii) disclosure of disaggregated revenue
and disclosure of opening balance of receivables, contract assets and
contract liabilities as per the requirement of Ind AS-115.
1.3.5.4 Changes in Policies, Laws and Rules and Procedures at the instance of audit
Some of the changes in the policies, laws, rules and procedures made by the
Ministries/Departments of the Union/State Governments based on our observations are
as follows:
1.3.5.4.1 Union Audit
(i) Direct Taxes - Report No. 14 of 2020 – Performance Audit of “Search and
Seizure assessments in Income Tax Department”
Based on the audit observations included in the Audit Report, the Finance
Bill, 2022, introduced the following amendments to the Income Tax Act:
a) Insertion of a New section 79A providing that no set off of losses,
whether brought forward or otherwise, or unabsorbed depreciation,

61
shall be allowed to assessee against undisclosed income consequent
to a search under section 132 or a requisition under section 132A or
a survey under section 133A other than under sub-section (2A) of the
Income Tax Act.
b) Insertion of section 153(f) in explanation 1 (xii) providing that the
appraisal report along with seized material be handed over to
assessment wing within the period not exceeding one hundred and
eighty days after the end of search and seizure.
c) Insertion of sub-section (1A) in section 149 providing that where the
income chargeable to tax represented in the form of an asset or
expenditure escaped the assessment and the investment in such asset
or expenditure in relation to such event or occasion has been made or
incurred, in more than one previous years relevant to the assessment
years, a notice under section 148 shall be issued for every such
assessment year for assessment, reassessment or recomputation, as
the case may be.
(ii) Railways Audit
Report No.19 of 2019 (Compliance Audit)
(a) Paragraph No.7.1 – Audit raised an observation that South Eastern
Railwayshadpurchasedstoresitemsathigherrateswithoutconsidering
the rates of procurement by neighbouring Zonal Railways that was
readily available in the Integrated Material Management Information
System (iMMIS).
In view of this, Ministry of Railways (Railway Board) issued instructions
that the information/data captured on real-time basis should be
proactively used by utilising various functionalities available in
these systems, to enhance the efficiency of procurement including
consideration of bids.
(b) Paragraph No.4.1 – It was observed that COFMOW did not have any
mechanism to track the progress of installation and commissioning
of the machines. Based on audit observation, changes were made in
policies for monitoring the installation and commissioning of machines.
(c) In response to Paragraph No.6.5 regarding avoidable expenditure
due to delay in completion of work of Traction Sub Station (TSS) at

62
SAI INDIA
Limkheda in Ratlam Division of Western Railways, changes were made
in policies for construction and commissioning of TSS.
(d) In response to Paragraph 2.2 regarding working of Automatic Ticket
Vending Machines (ATVMs) in Indian Railways, changes were made in
policies for monitoring of working of ATVMs.
(iii) Commercial Audit
a) In Paragraph No.13.5 of Report No. 18 of 2020 (Compliance Audit),
it was pointed out that Rourkela Steel Plant (RSP) of Steel Authority of
India Limited (SAIL) did not comply with Industrial Policy Resolutions
of Government of Odisha regarding availing exemption from payment
of electricity duty on captive power generation leading to avoidable
payment, based on which SAIL adopted a new Standard Operating
Procedure (SOP) for obtaining statutory clearances, permissions,
exemptions etc. relating to new electric power generation system.
b) In Report no. 11 of 2021 - Performance Audit on “Implementation
of Phase-III Delhi Mass Rapid Transit System by DMRC”, the audit
inter alia pointed out that (i) DMRC did not have any approved policy
for selection of type of corridor i.e., elevated, at grade or underground;
(ii) there was also no monitoring of compensatory afforestation
locations and disposal of wood as per permission letters of Forest
Department, Government of National Capital Territory of Delhi; and
(iii) DMRC did not conduct any water audits at its stations, depots
and construction sites from 2011 till date, based on which following
corrective actions were taken by DMRC:
• For preparation of DPRs, DMRC formulated a policy for selection of
type of Metro corridor
• A system of monitoring of actual tree cutting, transplantation
and disposal of wood obtained on tree cutting was evolved which
would be done by DMRC against each permission received from
Forest department, Government of National Capital Territory
of Delhi.
• Water audit was made an integral part in Phase-IV project.

63
1.3.5.4.2 State Audit
(i) Madhya Pradesh
a) (Para No. 4.4.6.1 of Report No. 4 of 2021 on PSUs, for the year
2018-19 tabled in legislature in December 2021) Due to
non-incorporating of price fall back clause and 50 per cent quantity
reduction clause in the agreement, the MP Power Transmission
Company Limited could not avail of the benefit of reduced price and
had to incur extra expenditure. Based on Audit observations, the
Company made necessary provision for price fall back for balance
quantity of supply tender bidding documents.
(ii) Tamil Nadu
Report No.8 of year 2020-21 on Performance Audit on “Implementation
of 74th
Constitutional Amendment Act”
The State Government took the following actions on the audit observations
appearing in the Report:
• Local Body election in Tamil Nadu was conducted in February
2022.
• Property Tax revision was effected in all Urban Local Bodies in
Tamil Nadu in April 2022.
Para 3/IIA of Inspection Report No. 27-07/2021-22 in respect of O/o the
Commissioner of Handlooms and Textiles, Chennai
On pointing out that the claim of the GST by M/s Co-optex towards the
handling charges in respect of O/o the Commissioner of Handlooms and
Textiles was inadmissible, the Commissionerate office addressed the
Authority for Advance rulings under section 98 of GST tax 2017. The ruling
came in favour of the Handlooms and Textiles Department upholding the
view of Audit. Accordingly, the Government Order was issued in December
2021 under the proceedings of the Authority for Advance ruling U/s 98 of
the GST Act, 2017.
IR.NO. C-20-020/2020-21 (O/o District Educational Officer (DEO),
Ariyalur district)
Based on the audit recommendation, the Government of Tamil Nadu issued
a G.O. in November 2021 directing the Director of Matriculation Schools to
restrict the reimbursement of fees to 75 per cent of the annual school fees

64
SAI INDIA
for the year 2020-21 to the private schools who admitted children belonging
to the disadvantaged groups and weaker section under section 12(1)(c) of
the Right of Children to Free and Compulsory Education (RTE) Act, 2009.
(iii) Rajasthan
Report (Local Bodies) for the year ended 2020 Audit pointed out a
fraudulent payment of ₹10 lakh for the incomplete construction of
community hall near Government Primary School, Chaukhal Bara, PS
Jhadol, ZP Udaipur for which Completion Certificate of work was issued by
using the picture of other community hall and expenditure was adjusted by
ZP. Government of Rajasthan informed (September 2021) that instructions
had been issued to BDO, Jhadol to initiate action for recovery, FIR or
disciplinary action against the concerned officers, as required.
Para 2.8 of Report (Local Bodies) for the year ended 2020 on Fraudulent
payment to contractors Audit observed that fraudulent payment of ₹1.06
crore was made to five firms without availability of duly verified bills.
Such payment was possible only if the digital signatories (the Maker and
the Checker of the FTOs) share their authority with others who collude
with such firms. Government of Rajasthan issued guidelines to all District
Collectors (January 2021) to ensure that government officers responsible
for payment do not share their digital signature certificate with any
contractual person and in no case, a contractual person is authorised to
make payments
(iv) Uttar Pradesh
Report No.6 of 2021 - Performance Audit on ‘Land Acquisition and
Allotment of Properties in NOIDA’ Out of 27 recommendations regarding
policies/Rules, in the Performance Audit Report, 23 recommendations
were accepted by the Government of Uttar Pradesh
Report No.3 of 2021 - Performance Audit on ‘Centralised Information
TechnologyBillingSystembeingoperatedbyStatePowerUtilities’-Outof
eight recommendations regarding policies/Rules, seven recommendations
were accepted by the Government.

65
1.3.6 Follow Up on Audit Findings and Recommendations
ISSAI 10 prescribes that SAI should have independent procedures for follow up
to ensure that audited entities properly address their observations and recommendations
and that corrective actions are taken. Regulations on Audit and Accounts 2020 stipulate
that the Secretary to Government of the concerned Department shall cause preparation
of self-explanatory Action Taken Note(s) on the audit paragraph(s) relating to his/her
Department, that are included in the audit report, for submission to the Public Accounts
Committee/Committee on Public Undertakings.
An Action Taken Note (ATN) states-
• Whether facts and figures in the audit report are acceptable;
• Whether circumstances in which the irregularity pointed out by audit
occurred;
• Action taken to fix responsibility and likely time frame for its completion;
• Current status of recovery;
• Action taken or proposed to be taken on suggestions and recommendations
made by audit; and
• Remedial action taken or proposed to be taken to avoid recurrence of
similar lapses in future.
During 2021-22, 3,034 ATNs were received from the Ministries/Departments
of the Union (1,560 ATNs) and State Governments (1,474 ATNs) of which 2,649 ATNs
(1,468 ATNs from Union Government and 1,181 ATNs from State Government) were
vetted by offices of SAI India. 992 ATNs (472 ATNs from Union Government and 520 ATNs
from State Government) were settled during the year.
ATNs on 16,032 Audit Paragraphs (1,070 pertaining to Union Government and
14,962 pertaining to State Governments) were pending for submission by the Union and
the State Governments. Of these, ATNs on 9,323 paragraphs (Union Government-505,
State Governments-8,818) were not submitted even once by the Governments.
Consequently, Audit could not verify the remedial action taken or proposed to be taken
to avoid recurrence of similar lapses in future.

67
The duties and powers of the CAG, in relation to the accounts of the Union and
States, are laid down in Article 149 of the Constitution of India read with Sections 10, 11
and 12 of the CAG’s DPC Act, 1971. The CAG is responsible for compilation and preparation
of accounts of State Governments (other than NCT of Delhi and Goa), maintenance of
General Provident Fund (GPF) accounts in 20 States, authorisation of pension payments
of State Government employees in 19 States and Gazetted Entitlement (GE) functions in
nine States. Details are furnished in Table II.2.1 at the end of this Chapter.
2.1 Performance related to Accounts function
2.1.1 State Principal Accountants General (PAsG)/Accountants General (AsG)
(Accounts & Entitlement) prepare the Annual Finance and Appropriation Accounts of the
respective States, which, after certification by Audit, are signed by the CAG for being laid
in the State Legislatures as per the prescribed timelines.
2.1.2 Besides the Annual Accounts, various MIS reports relating to Monthly Civil
Accounts and Expenditure figures are provided to the State Governments regularly.
Annual Accounts at a Glance are also prepared by PAsG/AsG Accounts & Entitlements
(A&E) for forwarding to the State Governments which gives a broad overview of Finance
and Appropriation Accounts and also fiscal indicators over a period of five years.
2
Fulfilling our Accounts
Mandate
Chapter

68
SAI INDIA
2.1.3 Timeliness of Accounts
i. Finance and Appropriation Accounts
The Finance and Appropriation Accounts of 27 States for 2020-21 were
certified by end March 2022 of which Accounts of 17 States for 2020-21
were placed in the State Legislatures by end of Budget Session for 2022.
Accounts of Himachal Pradesh for 2020-21 were under finalisation.
ii. Monthly Civil Accounts
256 out of 3641
monthly civil accounts were rendered by the A&E Offices
on time during 2021-22. There were delays in rendering the remaining
accountswhichweremainlyduetolatereceiptofaccountsfromTreasuries/
Divisions/other accounts rendering units of State Governments and in few
cases due to COVID-19 Pandemic induced lockdowns during 2021-22.
2.1.4 Completeness of Accounts
The Monthly Civil Accounts rendered to the State Governments during 2021-22
were complete in all respects. No accounts were excluded in the States’ Annual Finance
Accounts 2020-21.
2.1.5 Combined Finance and Revenue Accounts
The Combined Finance and Revenue Accounts (CFRA) of the Union and State
Governments is an informative compilation that integrates important information
pertaining to the accounts of the Union, Union Territories and all the States for a year,
together with their balances and outstanding liabilities and other information as to the
financial position. CFRA is published annually and is useful to several stakeholders as it
consolidates the financial position of the Union and the States in one place. While the
broad framework of CFRA has been retained, the revised version adopted with effect
from 2016-17 is more analytical.
The CFRA statements comprising three volumes are compiled by AG (A&E)
Punjab and audited by the AG (A&E) Haryana. “Union and State Finances at a Glance”
is prepared by Government Accounts Wing of CAG Office to complement the CFRA
Statements.
1
28 States x 13 Accounts in a year including March (Supplementary) Accounts

69
The CFRA for 2019-20 was at an advanced stage of finalisation at the end of
March 2022. The dashboard hosts CFRA data for a period of five years up to 2019-20 for
the Union/States and UTs on the CAG website2
.
2.1.6 Reserve Bank Deposits (RBD) reconciliation and timely
remittances of Government revenue – Initiatives taken
The Reserve Bank of India (RBI) is the banker to the Government. The RBI
authorises agency banks on the request of the State Governments to carry out the
Government’s business.
It was observed that cash balance of the State Governments as reported in
the Accounts by AG (A&E) was not in agreement with the cash balance reported by
RBI and the same was being commented in Notes to Accounts of each State’s Finance
Accounts.
In order to streamline the cash balance reconciliation process and timely
remittances of Government revenue, a Standard Operating Procedure (SOP) on RBD
reconciliation has been issued in August 2021 for adherence by all PAsG/AsG (A&E).
2.1.7 Treasury Inspections
PAsG/AsG (A&E), being the compiler of State Government Account, through
Treasury Inspections of the State Government Accounts, examine the internal control
mechanism in Treasuries. The objective of a treasury inspection is to seek an assurance
that various checks and procedures prescribed for the preparation of initial accounts,
payment of salary, pensions, etc., are being duly complied with by the treasuries.
Treasuries in almost all the States are computerised.
During 2021-22, inspections of 1,481 treasuries/sub-treasuries were carried
out against the total planned 1,870 treasuries/sub-treasuries. The shortfall in inspection
was due to COVID-19 outbreak. As a result of these inspections, 1,200 Inspection Reports
were issued wherein 3,195 recommendations were made.
2
http://cag.gov.inAccounts Dashboard for Union and State Finances

70
SAI INDIA
2.1.7.1 Results of treasury inspections
Thetreasuryinspectionsrevealedanumberofdeviationsrelatingtocompliance
with State’s financial/entitlement rules, pointing towards fault lines in the internal control
systems which impact the financial management of the States. A few instances are given
below:
• In Meghalaya, contribution towards New Pension Scheme was not
deducted in 824 cases and compulsory deduction of General Provident
Fund subscription was not made in 311 cases.
• In Rajasthan, non-recovery of overpayment of departmental dues was
noticed in 15 Treasuries, non-recovery of Tax Deducted at Source (TDS)
from taxable pension arrear was detected in 11 Treasuries and cases of
irregular/overpayment of Social Security Pension to ineligible persons was
pointed out in nine Treasuries.
• In Jammu and Kashmir, excess payment of pension/family pension to
the tune of ₹25.54 lakh approximately was noticed in 13 Treasuries/Sub-
Treasuries.
• In Andhra Pradesh, we noticed drawal of ₹41,043.08 crore in the form of
Special Bills by passing codal provisions, fraudulent drawal of vehicle bills
of ₹97.35 lakh by DDOs and double drawal of different types of bills to the
tune of ₹38.38 lakh.
• In Jharkhand, excess payment of death-cum-retirement gratuity was
noticed.
• In Bihar, non-deduction of TDS from pension paid was noticed.
2.2 Performance with regard to Entitlement Functions
Across the board, A&E offices have made efforts to improve satisfaction levels
by expediting disposal of final payment cases of GPF, authorisation of pension and issue
of pay slips, etc., by streamlining entitlement functions. Moving towards electronic data
transfer, e-authorisation has reduced the time taken for disposal of cases in some offices.
All efforts were made to adhere to the time frames for disposal of cases as laid down in
the Citizens’ Charter. Online complaint redressal mechanisms are functioning in almost all
A&E offices.

71
2.2.1 Information related to Entitlement functions
Information relating to the status of pension, GPF and GE functions is available
on the websites of respective AG offices and through SMS based services where details
have been provided by the employees of the State Governments to the offices. This
enables the concerned stakeholders and other visitors to view information uploaded on
the respective State AG’s websites and receive intimation through SMS as well.
2.2.2 Pension cases finalised
The function of pension authorisation is being carried out by 20 A&E offices.
These offices finalised total 6,16,698 cases of Original and Pension Revision during
2021-22. The State-wise total pension cases received and finalised during 2021-22 are
given in Table II.2.2 at the end of the chapter. As per the Citizens’ Charter, original pension
cases are to be finalised within 30 working days from the receipt of the case complete in
all respects in the AG office. The average time taken for finalisation of pension cases was
within the prescribed timeline in Andhra Pradesh, Assam, Haryana, Himachal Pradesh,
Jammu and Kashmir, Jharkhand, Kerala, Meghalaya, Nagaland, Punjab, Telangana and
Tripura. In remaining States, average time taken in finalisation of a Pension case was more
than 30 days mainly due to wanting information from the Departments concerned or
other operational hindrances due to COVID-19 lockdowns.
2.2.3 Maintenance of GPF Accounts
In 20 States, 22 A&E offices are responsible for the maintenance of GPF
accounts of the State Government employees. During 2021-22, 26,93,856 GPF accounts
were maintained by these offices. Due to introduction of National Pension Scheme by
the State Governments, with effect from 2004 onwards, there has been a reduction of
5.18 per cent subscribers (last year total number of subscribers were 28,41,122) in
comparison to the previous year.
2.2.4 Finalisation of GPF Final Payment cases
No. of GPF final
payment cases
due in 2021-22
No. of final
payment cases
finalised
1,94,902 1,84,658
During 2021-22, out of 1,94,902
cases due for final payment of GPF, the A&E
Offices finalised 1,84,658 cases (94.74 per
cent) within the prescribed time limit.

72
SAI INDIA
2.2.5 Proactive engagement with stakeholders
During 2020-21, Adalats/Workshops/Lokvani/Samvaad for pensioners/
subscribers were convened at site and virtually as well, due to COVID-19 pandemic. Few
instances of such interactions are described below:
Haryana, Karnataka & Telangana
AG (A&E) Haryana conducted a Pension Adalat on 30 March 2022 in which
apart from Pensioners/Family Pensioners, representatives from Treasury & Accounts
Departments and Banks were also present. In view of the Covid pandemic, AG (A&E)
Telangana conducted a Virtual Pension Adalat in respect of Agriculture Department
on 27 August 2021. Out of 16 pending pension cases taken up at Adalat, seven
cases were finalised immediately on receipt of replies from Pension Sanctioning
Authorities. Similarly, AG (A&E) Karnataka also conducted Pension Adalat on
24 February 2022 through Video Conference.
Pension Adalat organised by Pr. AG (A&E) office, Karnataka

73
Uttar Pradesh
Six Treasury Workshops were organised at different places in Uttar Pradesh
between October 2021 to December 2021 with an objective to sensitise the Treasury
Officers/DDOs regarding GPF minus balances cases, clearance of un-posted and missing
credit items.
Himachal Pradesh
Like previous year, during 2021-22 Himachal Pradesh Office initiated quarterly
participation in a Live Phone-in programme of All India Radio (AIR) - ‘Lok Vani’ to interact
with pensioners/subscribers as a part of the pro-active initiative to increase the outreach
for pension related issues, to offer convenient and inexpensive redressal mechanism/
confidence building measures. In this programme, citizens are invited to call the AIR
Centre to discuss their issues and seek clarifications pertaining to Pension and GPF. The
officers of the AG(A&E) office are present at the venue during the programme and redress
the grievances of pensioners and GPF subscribers on the spot to the maximum extent
possible. Besides the programme on AIR, a ‘Janvani’ programme was also telecasted by
Doordarshan Kendra, Shimla on monthly basis to apprise the public about the entitlement
functions of AG Office.
Maharashtra
Owing to the COVID-19 pandemic, AG(A&E)-I, Maharashtra held online Pension
Adalat for Nasik Treasury and named as ‘Pension Samvaad’ with the pensioners through
WhatsApp to address their issues.
After registration for the Samvaad, a link was shared on the ‘Sevaarth’ and
‘Nivruttivetanwahini’ portal of the State Government. Posters were also hosted on
the website for wide publicity. The first such Online Pension/GPF Samvaad was held on
2 March 2022 through WhatsApp Video call. Though, it was meant for the pensioners
from Nasik Treasury, applications were also received from various other Treasuries.
WhatsApp video calls were made to the pensioners and queries were addressed to their
satisfaction.

74
SAI INDIA
Online Pension & GPF Samvaad organised by
Pr.AG(A&E)-I, Maharashtra
Workshop cum Adalat on Pension, Provident Fund
& Accounts for DDOs organised by Pr.AG(A&E)-I,
Maharashtra
Tamil Nadu
Missing credit clearance drive (MCCD) was initiated for clearance of missing
credits by AG(A&E) Tamil Nadu. Officials were deputed to visit five to six Treasuries/Pay
and Accounts Offices since October 2021 to collect the details for the missing credits.
Prior to the visit of the officials, DDO wise list of missing credits were sent to the Treasury
officers/Pay and Accounts Officers concerned. So far, 19 out of 41 Treasuries/PAOs have
been covered and it is proposed to cover the rest of the Treasuries/PAOs by April 2022
as a first round of collection of recovery details to clear the missing credits prior to the
upload of Annual Account statements for the year 2021-22. Due to the MCCD initiative,
40,600 missing credits of 9,065 subscribers have been cleared in five months.
Workshop organised by AG(A&E), Tamil Nadu for clearance of Missing credits

75
3
https://cag.gov.in/en/page-entitlement-grievance
2.2.6 Web-based Grievance Redressal Mechanism in CAG’s
website
ThereisacentralisedWeb-basedGrievanceRedressalMechanismforregistering
grievances online. GPF subscribers/Pensioners can register complaints online or through
e-mails to the concerned A&E office. In case, a subscriber/pensioner is not convinced
with the reply of the AG office then complainant may also register grievance with the
Complaint Wing of the CAG office. All the links related to grievance redressal system are
available on CAG’s website3
. On lodging the grievance, the system automatically generates
a unique registration number of the grievance and sends an SMS to the complainant for
future reference.
During 2021- 22, 2,353 grievances were received in CAG office from State
pensioners/subscribers of which, 2,233 were redressed within the timeframe of the
Citizens’ Charter. There were 120 grievances pending for disposal which were within the
prescribed period (30 working days) of Citizen Charter. A report on grievances received
and redressed is submitted to higher authorities on monthly and quarterly basis.
2.3 Evaluation of performance of A&E Office through
quarterly KRA reports
Government Accounts Wing is evaluating performance of Accounts &
Entitlement functions of all the A&E offices on quarterly basis through in-house developed
grading scheme of Key Reporting Areas.

76
SAI INDIA
Note: *These offices are composite offices for A&E and audit functions.
$ Madhya Pradesh, Maharashtra and Uttar Pradesh have two A&E offices. AG (A&E)-II, Madhya
Pradesh has only GPF functions
Table II.2.1 Functions with State Accountants General (A&E)
Accounts General Provident
Fund
Pension Gazetted
Entitlement
1. Andhra Pradesh 1. Andhra Pradesh 1. Andhra Pradesh 1. Assam
2. Assam 2. Assam 2. Assam 2. Bihar
3. Arunachal Pradesh* 3. Chhattisgarh 3. Bihar 3. Jharkhand
4. Bihar 4. Gujarat 4. Haryana 4. Karnataka
5. Chhattisgarh 5. Haryana 5. Himachal Pradesh 5. Kerala
6. Gujarat 6. Himachal Pradesh 6. Jammu & Kashmir 6. Manipur
7. Haryana 7. Karnataka 7. Jharkhand 7. Meghalaya
8. Himachal Pradesh 8. Kerala 8. Karnataka 8. Nagaland
9. Jammu & Kashmir 9. Madhya Pradesh 9. Kerala 9. Tamil Nadu
10. Jharkhand 10. Maharashtra 10. Maharashtra
11. Karnataka 11. Manipur 11. Manipur
12. Kerala 12. Meghalaya 12. Meghalaya
13. Madhya Pradesh$
13. Nagaland 13. Nagaland
14. Maharashtra$
14. Odisha 14. Odisha
15. Manipur 15. Tamil Nadu 15. Punjab
16. Meghalaya 16. Telangana 16. Tamil Nadu
17. Mizoram* 17. Tripura 17. Telangana
18. Nagaland 18. Uttar Pradesh 18. Tripura
19. Odisha 19. Uttarakhand 19. West Bengal
20. Punjab 20. West Bengal
21. Rajasthan
22. Sikkim
23. Tamil Nadu
24. Telangana
25. Tripura
26. Uttar Pradesh$
27. Uttarakhand
28. West Bengal

77
Table II.2.2 State-wise finalisation of Pension cases and Revision
of Pension cases during 2021-22
Sl.
No.
Offices Original Pension Revision of Pension
No. of cases
received
(including
opening
balance)
No. of
cases
settled
No. of cases
received
(including
opening
balance)
No. of
cases
settled
1 Andhra Pradesh 12,015 11,274 5,376 4,812
2 Assam 14,759 13,437 979 893
3 Bihar 28,473 25,077 23,330 20,162
4 Haryana 11,960 11,960 30,504 30,504
5 Himachal Pradesh 12,439 11,778 2,261 1,866
6 Jammu & Kashmir 16,057 16,047 25,673 25,544
7 Jharkhand 10,458 10,089 31,543 24,966
8 Karnataka 23,932 23,886 9,713 9,658
9 Kerala 19,072 18,945 32,612 31,204
10 Maharashtra-I 28,628 28,628 36,335 33,363
11 Maharashtra-II 18,006 18,006 32,473 32,473
12 Manipur 5,558 3,837 7,528 4,796
13 Meghalaya 3,208 3,160 221 214
14 Nagaland 3,738 3,699 5,567 5,551
15 Odisha 13,432 12,521 3,281 2,906
16 Punjab 15,729 15,729 43,725 41,286
17 Tamil Nadu 12,703 11,936 9,824 9,357
18 Telangana 2,602 2,444 27,116 27,023
19 Tripura 4,442 4,150 56 54
20 West Bengal 22,566 17,803 51,477 45,660
TOTAL 2,79,777 2,64,406 3,79,594 3,52,292
Total cases received
(Original Pension cases
and Revision pension
cases)
6,59,371
Total cases settled 6,16,698

Performance Report of SAI India for 2021-22

Performance Report of SAI India for 2021-22

Recommended

Recommended

More Related Content

Similar to Performance Report of SAI India for 2021-22

Similar to Performance Report of SAI India for 2021-22 (20)

More from Life of A Public Auditor

More from Life of A Public Auditor (20)

Recently uploaded

Recently uploaded (20)

Performance Report of SAI India for 2021-22